Washington Answered a Real Fuel Shortage With Paperwork

When Vladimir Putin announced the diesel he'd sell to American drivers, he took credit first and hedged second: prices, he said, had already fallen on the mere announcement.

diesel prices dropped after the agreement. — Vladimir Putin

The cargo Washington waived sanctions for comes from a country that banned its own diesel exports outright in July and has rationed fuel across 56 of its regions ^[1]. A Ukrainian strike on the St. Petersburg export terminal ended an energy ceasefire even as the first tanker, 40,000 tons, departed October 22 under a deal announced to cut prices before the November 3 vote ^[2]. Since October 7, Washington has answered this shortage with four instruments, and every one of them is paper. The first was a tax. The president signed an order waiving the off-road rule that keeps tax-free red-dyed diesel off the highway, and he made the prediction in his own words.

this order will also drive down the cost of all goods, including grocery prices, very substantially. — Donald Trump

The waiver changed which trucks may burn which dye. It did not refine a gallon ^[3]. The second was a sanction: the waiver that let that tanker legally reach American pumps, supply that still had to survive a Russian export ban and a refining system Ukraine's drones have been dismantling. The third was money. Eight billion dollars in diesel checks for farmers, announced at a Kansas rally and dated to go out after the November 3 vote, on top of a record $55.4 billion in farm payments this year ^[4]. The fourth was a promise: the Ratepayer Protection Pledge, explicitly non-binding, floated against $23.1 billion in utility rate requests ^[5]. A tax, a sanction, money, a pledge. None of it is a barrel. Behind all four of those papers sits a number. The International Energy Agency counted it plainly: supply lost to Ukrainian strikes on Russian refining and the Iran war's closure of Middle East refineries has cut global diesel exports by 1.3 million barrels a day and pushed refining margins to record highs near $95 a barrel, a shortage already showing up in the consumer price index ^[6]. AAA blames limited refining capacity and tight demand, not regulation ^[7]. By one measure this is the fourth-largest inflation-adjusted fuel shock since 1973 ^[8]. In September there was an argument that none of it was real, that prices were a speculative artifact set to collapse after the midterms ^[9]. The physical record answered it. On the very day American pump prices hit records, Russia extended its own diesel export ban through January 2027, keeping only selected exemptions, while Deputy Prime Minister Novak downplayed the Ukrainian strikes as unlikely to matter much even as his own government held the ban to stabilize its domestic market ^[10]. The Kremlin's spokesman, explaining the partial lifting after the Trump deal, cited a significant global shortage of petroleum products ^[11]. Ukraine's president has a name for the drone campaign that disabled between a third and half of Russian refining ^[12].

the most effective sanctions … the sanctions that work the fastest. — Volodymyr Zelenskyy

The pattern repeats in the field, where the administration's other hand is at work. Immigration enforcement has removed 1.2 million workers in six months ^[13], roughly 155,000 of them from farms, with dairy operations selling off livestock for lack of labor ^[14]. The administration brushed the industry's warnings aside.

If people want to come to our country to work, they need to do that by coming here the legal way. The assertion that the only way we can support industries is by allowing unvetted illegal aliens and foreigners to remain in the country is grossly false and lazy. — U.S. Department of Homeland Security

Meanwhile the fuel bill does its own subtraction. One Texoma farmer projects a $100,000 fuel bill, and farmers are already deciding next year's planting around diesel costs ^[7]. Farmers have their own name for the labor fix on offer, the H-2A visa.

This is the moment of the great reveal: folks are now appreciating there are folks here in agriculture adding a whole lot of value to this food system in our communities who are not recognized. — Russell Redding

Next year's food supply is being cut right now, in planting decisions made by farms short workers and facing record fuel bills. The quietest number in the record says it hasn't reached the grocery shelf yet: Midwest gasoline is up 35.5 percent and electricity up 8.8 percent, but Midwest grocery inflation sits at 1.5 percent ^[15]. The squeeze on the harvest is still prospective, priced into this fall's decisions rather than the price of milk. The farmer with a $100,000 fuel bill and no hands to bring in the crop has no paper answer. He is planting less next year, and the check dated after the election will arrive too late to change his mind.